This year’s update on average fleet operating costs from the American Transportation Research Institute reported a staggering increase in the average operating cost per mile for the second year in a row -- almost a half-dollar/mile, totaling up to a historically high $2.25 per mile. That’s an increase we’d expect to lead a stampede to the exits from trucking by a huge array of carriers, small and large.
Times are tough, sure, yet judging by the recent commentary of Werner’s CEO, it’s also sure many independents and small fleets are hanging in just fine. (The CEO expressed veritable shock at small fleets’ resilience given the harsh rates/high cost environment.)
Spot market rates for vans have been ticking along well below that $2.25/mile figure for quite some time now, reefers and flats most weeks not very far at all above it, leading the Werner CEO to wonder at how small fleets and independents could run at a loss for so long.
How could that be? Whether you're making a decision to accept a reduced profit expectation or to simply not pay yourself for as long as possible, making enough to get the old truck down the road, it's easy to rationalize actions in all sorts of ways.
Routine can set a trap, though. The longer difficult conditions persist, the more likely reduced expectations become the standard operating procedure. That’s a good way to slowly fail in business and find yourself among the legions of former owners driving company trucks.
Many owner-operators and fleets received a huge injection of capital through the various emergency-loan programs during the pandemic. I see these functioning as a safety net for some owners who, in another time, might have downsized or closed their business altogether.
